Business Licenses are legal documents that are issued by governments at different levels such as federal, state, county and city. These licenses and permits allow a business to conduct operations and maintain legal compliance. They are usually required for professional regulation, tax reporting and to protect the safety and general health of the public. Obtaining a business license is one of the first steps involved in starting a business. Any failure to properly maintain business license compliance could result in fines, penalties, business closure or legal consequences.
JURISDICTIONS OF BUSINESS LICENSES
Licenses broken down by level of government include:
Federal Licenses & Permits
These are administered by agencies such as the:
- Food & Drug Administration (FDA), which regulates drug manufacturing and distribution
- Federal Communications Commission (FCC), which guides media broadcasting
- Bureau of Alcohol, Tobacco & Firearms (BATFE), which governs the sales of alcohol, tobacco & firearms
- Securities & Exchange Commission (SEC), which regulates public investment activity
- S. Department of Agriculture (USDA), which directs agriculture and the general farming industry
State Licenses & Permits
These are administered by state agencies such as the:
- Department of Labor, which usually governs state unemployment insurance
- Department of Professional Regulation, which establishes directives for a contractors license
- Department of Commerce, which insures businesses are operating within the bounds of the law
- State Lottery Commission, which oversees state lottery and raffle operations
- State Department of Transportation, which maintains transportation systems within the state
- Department of Environmental Protection, which regulates state level environmental activities
Local Licenses & Permits
These are administered by local agencies such as the:
- Building Inspection Department, which issues certificate of occupancy permits
- Tax Collector Assessor’s Office, which collects local level taxes on businesses
- Fire Marshal, which issues fire inspection certificates
TYPES OF BUSINESS LICENSES
Additionally, licenses usually fall into a specific list of categories which include:
- General Licenses: These include the most common type of general licenses that allow a business to operate at the county, city or local level.
- Zoning Use Permits: These permits will usually differentiate whether a business is operated from a commercial location or from a home. This may include certificate of occupancy permits.
- Professional or occupational licenses: These types of permits are usually regulated at the federal or state level. Some examples include medical, legal, accounting or automotive repair licenses.
- FEIN: This is a Federal Tax ID Number that businesses are required to obtain and which identifies the business for federal tax purposes.
- Seller’s Permit: These are state issued permits that allow businesses to collect sales tax on taxable products and services and remit the taxes to the appropriate government agencies.
- Weights & Measures Permits: These are permits that regulate businesses that sell goods by weight or in bulk. Some examples of this would be meat processors or confectionery suppliers.
- Health Department Permits: These are permits issued by health regulatory agencies at all levels of government. They usually involve businesses that concern the health and safety of the general public. Some prime examples of these types of businesses would be restaurants or doctors’ offices.
DO I NEED A BUSINESS LICENSE, AND IF SO WHICH ONES ARE REQUIRED?
There are tens of thousands of regulatory agencies across the United States. Trying to navigate and compile the licenses that are required for your specific business may be a daunting task that can take days to weeks of research. Fortunately, there is a better way to leverage your time more efficiently with the Business License Research Compilation Package. It is strongly recommended that new businesses follow this procedure as it is the easiest and fastest way to get the exact permits & documents needed to be compliant.
Business Licenses & Permits Compilation includes:
✔ Research of all Licenses & Permits needed for your Business
✔ Custom tailored analysis based on your Business structure, activity & industry
✔ Applicable licenses & Permits may include Federal, State, County & Local level Forms
✔ Custom Folder delivered via email to you in downloadable format
✔ All instructions and supporting material required to submit to the appropriate agencies
✔ Fill out and submit the actual applications at your own leisure
Apply online for a Business License Research Compilation Package, specifically tailored to your business by filling out the “Business License Research Compilation” form. After you complete the online process, you will receive your custom folder with all relevant documents and important information within 1-2 business days.
BUSINESS LICENSES BY STATE
BUSINESS LICENSES FAQS
A Business License is a permit issued by government offices at a Federal, State, County, City, or Local level that allows sole proprietors (individuals) and companies to operate a business in their designated geographical area. Multiple licenses are usually needed at the different levels of government to operate at just a single location. For example, a construction contractor would need a state contractor license, a county contractor license, a city occupational license, as well as possible local licenses. The type of business that the individual or company engages in, plays the biggest role in determining how many licenses are needed. So, for example, a construction contractor will need many more licenses than a retail clothing store.
If you are wondering how to apply for a Business License you are not alone. There are tens of thousands of regulatory agencies across the United States. Trying to navigate and compile the licenses that are required for your specific business may be a daunting task that can take days to weeks of research. Fortunately, there is a better way to leverage your time more efficiently with the Business License Research Compilation Package. This package will research all of the Licenses & Permits that are needed for your Business, while you get a custom folder delivered via email, so you can fill out and submit the actual applications at your own leisure. The package will provide you with all the instructions and supporting material required to submit to the appropriate agencies.
Yes, In the majority of cases a Business License will be required for an online store such as Amazon, eBay or Etsy.
In general, a Business License will be necessary before you start operations and derive income. If you operate the business and generate income you may be responsible for fines and/or penalties.
Yes, regardless of if the individual or company is turning a profit, a Business License is required for the business to operate.
You may or may not need a Business License based on your jurisdiction. Some governing agencies require one and some do not. If one is required, it is usually in the form of a “Home Occupation License”.
Whether you are selling tangible goods or selling services you would need a Business License. Business Licenses are based on the “operation” of a business and not what it is engaged in.
Fees for Business Licenses vary based on numerous factors. These included -but are not limited to- the type of business activity that the individual or company is engaged in, the amount of revenue the individual or company generates, and at what level and what agency the License is obtained from (State, County, or Local). These fees can range anywhere from $10 on the low end (such as an occupational license) to hundreds of dollars (such as a state contractor’s license).
Business Licenses generally do not expire and most licenses are renewed yearly (although some agencies and jurisdictions do not require annual renewal). If an individual or company dissolves their business, then it is their responsibility to contact the appropriate agency where their business license was issued and see what the agency’s procedure is. Do not assume that just because you go out of business, the government agencies will automatically close out your licenses. In most cases it is the opposite and you could find yourself incurring fines or penalties as these are a big source of revenue for these agencies. It is better to cover your bases and follow the law the best you can.
Register for your Sales Tax Permit and obtain your Sales Tax Number (State Tax ID Number) by filling out the one page “Online Sales Tax Permit Registration” form. It is Fast, Easy and Secure. After you complete the online process, you will receive a confirmation of all your important information within 1-2 business days.
This will vary by jurisdiction. Some places let you renew the license and just pay a late fee or penalty equivalent. Other places may make you begin the process from scratch and apply for a new license. Since licensing is done at the state, county, city, and local level, procedures can vary greatly so it is advisable to contact each specific agency accordingly.
Most agencies do not have the manpower or resources to monitor and track down businesses that are not complying, but if they do find out you are out of compliance then it could be a problem. This can range anywhere from fees and penalties to having to temporarily cease operations until you obtain the proper license. If an agency does track a business, it is usually through that businesses advertising methods. For brick and mortar business this is through print media such as newspapers or magazines and for online business this is usually through online advertising.
This can vary from agency to agency. Information such as birth date, driver’s license number, home address, business address, social security number (for individuals) and FEIN number (for companies) may be required.
In most cases you will need separate licenses if you have more than one business operating from a single location. However, some agencies may let you operate with one umbrella license for all the businesses. You must check with the governing agency to make sure you are in compliance.
If you have separate physical locations in different jurisdictions then yes, you will most definitely need separate licenses. However, if you are making deliveries to different locations for your customers then you may or may not need separate licenses. You would need to contact the governing agency to see what their rules are.
Generally, seasonal businesses and flea markets will be required to have a Business License. Flea Markets and Trade Shows may provide an umbrella License to their vendors as part of their fees. This is something that must be checked out with the owner of the flea market or the organizer of the trade show.
A Certificate of Good Standing (sometimes called Certificate of Authorization or a Certificate of Existence) is a document that certifies that a company is complying with all the regulatory statutes set forth by the governing jurisdictions. A certificate of Authority (sometimes called a foreign qualification) is a document a company obtains when it is located in a non-resident state. For example, if a company was physically located in New Jersey and it wanted to conduct business in Pennsylvania, it would obtain a certificate of Authority from Pennsylvania.
While the majority of business are required to have a business license, some jurisdictions allow exemptions based on the nature of the business. The most common examples of businesses that are exempt are non-profit organizations, churches, banks and other charity groups.